The Fear-Based Economy

Did I say, “additional tax increases”? Well, yes. The Wall Street Journalhelpfully reminded us on July 11 that tax hikes associated with ObamaCare amounting to $438 billion over the next 10 years will begin taking effect in 2013. Of course, these impending levies, the legislation’s stifling bureaucracy, and disastrous work disincentives have been hanging over employers’ growth and hiring plans since Pelosi, Reid, and Obama made it law 16 months ago.

As if we needed more problems, make no mistake: The economy, which has failed to grow at the brisk pace required for a genuine recovery in employment since the end of the recession, has shown signs of serious deterioration in the past few months. Here are just a few of the indicators:

In May and June combined, seasonally adjusted employment grew by only 43,000, while the unemployment rate rose in both months.

Consumer confidence is at its lowest level since March 2009, one of the worst months of the recession.

The director of the widely read Consumer Reports Index stated his belief last week in a radio interview that seeing the unemployment rate hit 9.6% in the next few months “is not out of the question.”

In mid-July, announced U.S. layoffs and terminations at Cisco and Borders alone were within striking distance of the number of seasonally adjusted jobs the whole economy gained in June.

On Friday evening, July 15, the better to avoid attracting much attention, Goldman Sachs dropped its annualized second- and third-quarter growth forecasts to 1.5% and 2.5%, respectively, and indicated that another recession is “clearly a possibility given the recent numbers.” Putting its employment practices where its predictions are, Goldman announced on Tuesday that “it might lay off as many as 1,000 employees globally.”

Most germane to the Washington discussions is the fact that federal collections, after rising steadily if not spectacularly for about a year, suddenly fell on a year-over-year basis in June.

When the economy is sitting on such a dangerous precipice, unless the goals are to deliver a knockout punch and to take the intimidating uncertainty to the level of debility (given this administration’s mindset, these cannot be ruled out), you don’t even think about raising taxes. With a federal budget hopelessly out of balance, all you can do is cut spending, period.

You also don’t raise taxes when you know, as anyone with an ounce of perception does, that for the next eighteen months if we’re lucky, or an unthinkable 66 if we’re not, we’re stuck with the current fear-based economy. I could be wrong, but I can’t conceive of anything this administration could do to change the current frightened mindset in the business community before it leaves the stage. Wynn agrees, saying that until Obama is gone, “everybody’s going to be sitting on their thumbs.”

Along with having a decades-long career in accounting, finance, training and development, Tom Blumer has written for several national online publications primarily on business, economics, politics and media bias. He has had his own blog, BizzyBlog.com, since 2005, and has been a PJM contributor since 2008.

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1.
Marie

Obama is a fad. He was elected by the same people who follow celebrities. Unfortunately for him his star is no longer still shiny. The worst thing for a obama Is already happening, people are starting to ignore him. The donations are not flowing in. The polls are dropping. He is either depressed or well on his way to being stark raving mad. He looks very ill too. A narcissist doesn’t part with his celebrity easily. The next eighteen months will be very painful to watch. His ideology will prevent him from changing course.

Do not underestimate the stupidity of the sheeple in America, or for that mater the GOP nomination process remember McCain and Dole. In addition the amount of voter fraud in 2012 is most likely going to be of historic proportions with masses of dead people, felons, and illeagle aliens all voting for Obambi.

With all due respect to Steve Wynn, why the hell die he support this socialist in the first place? Okay, I understand that one has to play ball with the political powers that be, especially in his business and in his state. But he should have kept his mouth shut in 2008. It’s one thing for brain-dead college youth to go insane over King Putt, but Steve Wynn should have known better.

Oh well, at least he’s got the cojones to pull no punches and be blunt. Hopefully, the Republican candidates will be just as blunt going forward to 2012.

By the way, a report at the Heritage Foundation which was published in the last day or so showed a staggering chart – the US was creating roughly 62,000 jobs per month but on the day Obamacare became law, that number dropped to 6,200. There’s the Republican ad campaign right there, people.

Be offended all you like…the ‘man’ and his policies are one and the same…I merely point out the most likely reason for his failure to grasp and practice common sense government economic policies during a recession…he is what he is

Yeah that’s right, Obama would never attack the man. You sound like a typical white person clinging to your gun and bible in the 57th state. That was like the special olympics of comments. Oh never mind, it would take the entire marine corpse to explain it to you in Austrian! You wouldn’t want to offend anybody while defending your country against domestic enemies would you? Play by the rules Robbins.

“Why shouldn’t the economy’s key players be afraid? In 2-1/2 years, Barack Obama and his administration have shown that they will do anything in their power — even if not in their constitutional power — to further their far-left redistributionist and science-free environmental goals. If it means subverting the rule of law to favor bankrupt union-dominated car companies, so be it. If it means shutting down oil drilling and exploration in the Gulf of Mexico and restoring it in slow motion at a cost of tens of thousands of jobs, well, that’s unfortunate collateral damage. If it means revoking an already-issued permit for coal mining, too bad, so sad.”

This barely scratches the surface of what Obama is doing. How about alienating Saudi Arabia, the world’s biggest producer of oil? Obama’s stupid overthrow of Mubarak and doing abosolutely NOTHING to Iran has really put a dent in our relationship with Saudi Arabia, just the world’s largest producer of oil. And how’s that working out for us at the fuel pump?

Oh, and how about the United States STILL being the largest contributer to the International Monetary Fund (the IMF), even though we’re BROKE! So Obama wants to bail out countries like Greece, Spain, Portugal, Ireland, and Italy, and he won’t even help reduce the national debt here in the United States. Just great.

And NOBODY is talking about Fannie and Freddie and how much money they are STILL losing, or all of the home foreclosures that are STILL on the bank’s books (and not going away anytime soon). I thought Obama’s “brilliant” economic team was supposed to fix these ticking time bombs? I guess the Democrats were wrong.

We are in deep trouble, gang, and the corporate CEOs already know it, which is why they are holding on to their money. The only thing that will change anything will be getting Obama out of office in November 2012. Then, if it’s not too late and he hasn’t totally destroyed our economy, we may have a chance at a real recovery.

“Further tax increases could bring an already frightened, sputtering economy to a standstill.”

Further borrowing will scare the world more and the raters. Sorry, but “the world” did not buy into the idea BushDebt was somehow beneficial. No Republican has any credibility on deficits until they say Bush’s tax cuts without spending cuts was a fraud. So what if Obama maxes out the credit cards? That doesn’t make people forget Bush.

Investment does not fear various tax adjustments. They fear regulations like Obamacare and uncertainty and debt.

The one Republican (Cain?) who stands up and says Bush’s policies were wrong and Obama is building on them wins the election. Might lose the National Review pseudo crowd, but that man, or woman, wins. You cannot hide the past, you must attack it.

OK…one more time. Reductions in tax rates have an inverse relationship to revenue i.e. lower tax rates result in higher revenues to the treasury. That’s because of the increased economic activity that lower tax rates stimulate. It’s actually been proven…yes by the Bush tax cuts, and Reagan tax cuts and Kennedy tax cuts…

So your B.S. about Bush tax cuts contributing to the deficit/debt is wrong. The problem has always been on the spending (expense) side of the ledger.

Please see “Missing the Debt” By Yuval Levin (http://www.nationalreview.com/corner/272407/missing-debt-yuval-levin). Take a close look at the first curve, circa 2005. The “Bush Debt” was due primarily to the Iraq war, and was on its way back down when Obama took office. Again, lowering taxes (within certain limits, see “Laffer Curve”) tends to increase government revenue due to its enabling of an expanding economy.

Also, don’t forget that Congress has the power of the purse, NOT the President. The President can suggest and recommend, but ultimately Congress says “yes” or “no” to any spending request, and can – and does – spend money that the President does not request. President Bush was operating with a hostile Congress, Obama’s Congress is hardly hostile.

JN, #1, you’re talking out of both sides of your mouth. In one breath, you admit that tax revenues increased after the Bush tax cut. In the next breath, you claim that not one cent of Bush debt has been repaid. Your argument is incoherent.

#2, EVERY conservative in America criticized Bush’s over-spending, which had NOTHING to do with his tax cuts. You should therefore stop criticizing conservatives who opposed Bush spending while supporting Bush tax cuts.

#3, your failure to follow point #2 will prove to all us conservatives that you’re not a conservative at all.

“No Republican has any credibility on deficits until they say Bush’s tax cuts without spending cuts was a fraud.”

The Bush tax cuts were growing the economy and very much on their way to zeroing the deficit until the Democratic Party policy created housing bubble popped. The only thing stupid thing Bush did was TARP. Obama was four times worse.

Don’t get me wrong, I despise Obama’s policies. I’d take the most RINO-ish Repub over him any day. He has certainly worsened our economic climate, and possibly directly caused some of it at least.

But he is not the primary cause for our malaise. If we had a healthy free-market economy to begin with, a few years of idiotic policies would not put us in the dumpster as much as we are now, with little prospect of major improvement. The reason we are in the shape we are in is because We the People have been a lazy and wicked sovereign of this nation for some decades. We have hired venal, corrupt, and incompetent ministers to run the nation, allowing and encouraging them to trample on our foundational Law in gross and obvious ways, enacting unConstitutional travesties from OSHA to EPA, from SocSec to Medicare, from the Dept of Labor to the FDA, and so many more, that throw not sand but boulders into the gears of business, benefitting no one but the bureaucrats and the megacorps. We haven’t had a free market in almost anything since the early 1900′s. The Feds claim the authority, bogus though it is, to regulate any durnfool thing they want to through the Commerce Clause. Never mind the enumeration of powers and the 10th amendment; they don’t care and We the People can’t be bothered to even read and understand the Constitution. Cutting taxes won’t do the job by itself; in order to cut enough to actually make a difference one would have to seriously cut into entitlements (which isn’t going to happen anyway; We the People have figured out how to vote ourselves a share in tax money). Doing that WITHOUT AT THE SAME TIME DRASTICALLY REDUCING THE REGULATORY BURDEN will only result in more misery. Cutting taxes, cutting expenditures drastically, and allowing business to flourish by actually following the Constitution is the only hope we have of economic health.

Blame it on yourself if you want. Try cutting your arms for more pleasure.

There has been an active subversion of this country and this culture for decades. Americans have always spent far more time with their families and businesses than with politics. It’s no crime and one of the primary reasons the country is the best thing that has ever happend to the world.

The subversives depended on that and they have been right, so far. But it isn’t an indictment of good Americans. The indictment is of power-mad radicals who are happy to make 6 billion peole suffer so they can be ensconsed as tyrants.

“There has been an active subversion of this country and this culture for decades.”

Hey, I agree with this, too.

Since I can hold these two opposing POVs at the same time, I must be a product of the socialistic education system we’ve been under for 50 years. It’s 2, TWO gums in one! Because we’re nice people (and we are!) we trusted the people we hired to do the job to do that job and not subvert us. We were laissez-faire.

Here’s Rand’s Objectivist philopsophy; “My philosophy, in essence, is the concept of man as a heroic being, with his own happiness as the moral purpose of his life, with productive achievement as his noblest activity, and reason as his only absolute.”

Doc…you stated ["The Feds claim the authority, bogus though it is, to regulate any durnfool thing they want to through the Commerce Clause."]

Careful! You could easily be labelled a moron around here for statements like that. Most folks around here obviously have no problems with what the government grants to itself as authority under the guise of the commerce clause.

“Most folks around here obviously have no problems with what the government grants to itself as authority under the guise of the commerce clause.”

Says the guy who thought non-binding healthcare payment “arbitration” panels could be effective or that binding ones weren’t death panels, and socialist ones that. By “around here”, you must mean the echo chamber you and your fellow trolls plan your yucks in, ’cause that isn’t anyone here at PJM but the other trolls like you…

Tommy…you’re beginning to present yourself as a common stalker! If you having anything of substance please do respond to me but his coming around at every oppotunity you’re online to toss darts at me is signs of a person with clinical problems.

“Tommy…you’re beginning to present yourself as a common agitator of liitle substance and indications of a person with clinical problems.”

I don’t know Tom, I make specific policy suggestions which obey the laws of economics, and I can back that up. I make specific criticism of your “ideas” which you can not or will not reply to. You make meaningless suggestions which can not work, which you do not pretend to back up, and you make inflammatory claims about the beliefs common to people on this site which you don’t pretend to justify with any quotes. I believe you are either an agitator on the left or an especially confused and useless supporter of the right.

Either way, you richly deserve to have your empty rhetoric called out. I’ll do it as long as I enjoy it, a perfectly rational reason to go about the task.

The alarm has been raised in a piece called “The Gang of Fools; Three Republican Senators Changed Parties”. It calculates that the sketchy proposal is heavy in taxation and light is cutting spending. It rightly points out that all of the cuts are in discretionary spending without touching Medicare, Medicaid and Social Security.

But most devastating is that by their calculation it threatens a total tax increase of 4-5 Trillion dollars. It stamps the proposal as economic growth-killing with some of the suggestions, like the eradication of the housing mortgage tax exemption, as devastating at this stage of the economic non-recovery. It warns that there are 52 million home owners (i.e., 104 million voters) that could blame the Republicans for this tax increase.

You are correct if it is implemented, but with each hour it would appear it is headed down the circular drain. But so right, the tax part is very clear, the spend cut part is illusive and sometime down the road (to serfdom).

These Rino’s are well intentioned just like their lib friends in the senate but completely out of touch with the real world.

Might I add that this is what we get with entrenched legislators who are mostly lawyers, have never worked in the real world, generally have ZERO experince in medicine, farming, banking, manufacturing, world trade, the military, real estate, blue collar work, mining, oil drilling, I think you get where I am going.

Yet these are the people who we elect to make decisions in all of these arenas that they know next to nothing about. We got what we voted for arrogance, condesencion and uninformed decisions.

We just lost another neighbor. They had stopped answering the door and suddenly they were gone-no moving truck no excitement about a new house-just gone! Then a few days later the papers were taped to their windows with the blue tape…foreclosure had claimed their home. He was a retired cop. I go downtown and their are more empty storefronts and fewer cars on the road. People are leaving town quietly trying to go to where the jobs may still exist. The loss of this neighbor broke my heart and has frightened me like never before. It used to be “God Bless America” and now it should be “God Help America”.

I once thought it somewhat of a joke, the concept if grabbing your survival gear and heading up for that cave in the hinterlands.

Now I truly wonder. I feel as if everything is about to turn into a “Mad Max” film.

If this keeps up, we will be in a “state of nature,” as they would say during the Civil War. And Civil War it may be – we are heading for a severe economic boot-to-the-face, all the while the powers-that-be glibly tell us not to worry.

It isn’t just businesses by a long shot. Normal people feel the same way. That’s why spending is so low, savings are so high and bullets are so scarce. People are clinging to what they have and unwilling to take a chance. Every dollar spent now is one dollar that can’t be used to protect your family in the coming catastrophes.

You know that if the marxists succeed, your lifestyle is going down, probably way lower than you fear.

They’re coming for you. Don’t doubt it for a second.

If we defeat them in 2012, the surge is going to make the Reagan economic recovery look like a ripple on a pond.

It is said that insanity is doing the same thing over and over again and expecting different results.

That isn’t what we have here.

The left has done the same thing over and over again because it creates precisely the result they intended.

The insanity is on our part for repeatedly falling for their lies and deceptions. How many times does Lucy have to pull the football away before Charlie Brown will wise up and aim his foot at her instead? How many times does the left have to pursue a destructive agenda while pretending to do the opposite before the American people will wise up?

Lee…probably its best to wake up before the ship is resting on the oceans floor! Many of us were on orange crates decades ago and were scoffed at as the crazies, by many of the same generations now on here…yes, this very site, demanding they have no share of blame.

And just why did these dopey businessmen support Obummer? He told Joe the Plumber he was going to redistribute the wealth, so what did they expect? Obummer has associations with deeply leftist and violent people like Dohrn, Ayres, Rev. Wright, Calypso Louie, and Rashid Kahlidi. If they expected freedom from the man who said he sought out the Marxist Professors, then they plainly stupid. The signs and evidence was there if they would just care to look.

If you don’t want far left politics don’t support far left politicans.

Years ago I was taught some core rules about politicians:
1. All governments always lie.
2. Whatever a presidential candidate promises, the opposite will come true.
3. Sex and fear both sell, but the villagers soon get tired of the boy who cries wolf.

Obama’s actions are understandable once you accept that he is at the forefront of those Americans who loathe and are embarrassed by America’s wealth, power, and influence. Their objective is cutting America down to size, and Obama is doing precisely that.

Tax ‘rates’ have had NOTHING to do with what brought the nation to this point of circumstance! Historically proven, tax rates have never detoured the nations economy and growth. Case in point! Look at the tax ‘rates’ during the rise and at the pinnacle of Americas greatest economic period. The very same legislative statutes that prescribe tax rates also provide for a myiad of exclusions thus, nobody, individual or corporate, pays the stated tax rate for their gross income bracket. Right now, the government is borrowing $.41 cents for every dollar spend and 40+% of America’s income producers pay little or NO income taxes. Add to that, an ever increasing 15+% unemployment NOT paying any taxes.

The loss of sustainable comptetive economies, systemic, arbitrary and circular inflation and a population that cannot be sustained within the realities of the resulting national economy are the majority problems…..not tax rates…not tax revenue.

Tax and interest rates could have been at ZERO and still we’d still seen the collapse of the latest bubble economy and all that has come with it.

Address and fix the real problems and the issues of tax would most likely become irrelevant. Until then, all the rhetoric over taxes is noting more than a ‘political’ diversion of convenience.

“Tax ‘rates’ have had NOTHING to do with what brought the nation to this point of circumstance!”

For the last 40 years, every “lowering” of tax rates has resulted in raised revenue. To pretend otherwise is beneath even you.

Of course the spending has to be controlled, and the regulatory beast needs to be beaten into a cage, and the socialist dregs of the New Deal buried. Lowered and drastically flatter taxes going forward are also an important part of getting the country back on track.

Actually, sitting on capital and not expanding or starting a business is only part of “going Galt”. The other parts, which we should be glad have not yet occurred, are 1) when the competent talent decides to leave the work force, or decides to work but at something menial and mindless, and 2) when the business owners of everything from manufacturing to construction to mining to transportation shut down their businesses and refuse to work in the current idiotic, confiscatory, lawless environment. As I said, we should be glad that has not yet happened.

So many seem to think Obama is the problem. Obama is not the problem. He is simply a major symptom. The problem – the root problem – is the 40% of We the People who still support this president. This is a base that would support Idi Amin for president. We have a terrible cancer that will is not going away without much more trouble than anyone is ready to consider yet.

Great article. But in your litany of horrendous Obama actions you didn’t mention the Boeing NLRB case, where they decided that companies in the US can no longer build a new plant and add jobs, especially in a right to work state, unless the labor union bosses approve the location. It, along with the GM bailout, is one of the worste examples of labor union cronyism I have ever seen.

Its folks like yourself who make it easy for a whole lot of long time traditional platform Republicans to turn away and be disassociated from the Tea party GOP of today. Often times the personal character of the people representing an organization or ‘movement’ take precedence over the issues. For many of the long time registered Republicans we know in several states, they too, are beginning to take note with the same disgust. I’d rather not be associated with folks like yourself representing any movement…at least based on how you’ve conducted yourself on here and with me. As it stands right now, our rather large family of voters may well be classified as ‘gone fishing’ on election day unless there are some state issues that interest us on the ballot….the FIRST time in our voting lives except when [I] was in Korea and Vietnam.

“Its folks like yourself who make it easy for a whole lot of long time traditional platform Republicans to turn away and be disassociated from the Tea party GOP of today.”

It’s folks like you who emphasize why the traditional RINOs need to be shut out. You wanted either a death panel no different from Obamacare at it’s worst, or you wanted a voluntarily obeyed body with no power to affect healthcare costs–and claimed that was progress. If that’s your idea of the GOP party platform, back it up with a plank out of the platform.

“Often times the personal character of the people representing an organization or ‘movement’ take precedence over the issues. For many of the long time registered Republicans we know in several states, they too, are beginning to take note with the same disgust.”

So if you are as I suspect a lefty troll, you’re a “concern” troll.

“I’d rather not be associated with folks like yourself representing any movement…at least based on how you’ve conducted yourself on here and with me.”

I’d be fine with you if you actually backed up something you claimed or proposed.

“As it stands right now, our rather large family of voters may well be classified as ‘gone fishing’ on election day unless there are some state issues that interest us on the ballot….the FIRST time in our voting lives except when [I] was in Korea and Vietnam.”

I think the number of voters who would have voted right who stay home because the GOP moves to far to the right will be insignificant, like the support you provided for your “healthcare proposal”.

And really, claims the Tea Party is too far to the right for the GOP establishment types like you are directly contradictory to this claim you made, “Most folks around here obviously have no problems with what the government grants to itself as authority under the guise of the commerce clause.”

Which claim you also haven’t backed up when called out.

You’re incoherent. You have not or will not back up your claims. You are empty rhetoric here, self-contradictory hot air.

Tommy…see you’re off your med’s again! By the way, can’t count on even one hand the instances you’ve ever ‘backed up’ any of your OPINIONS. Seriously tough Tommy! I understand the frustrations of your alter egos Joseph, Benito, and Adolf when they can’t get their ways here in the U.S. with our constitution and all.

What I don’t understand is why responsible CEOs such as Wynn don’t completely close down the money tree for Obama and the rest of the Dems. They know where the problems is, they see where the economy is going, and they still continue to put money into democratic coffers. One would think that they would be lobbying for impeachment.

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